ZCCM Investments Holdings has entered into a joint venture partnership through its subsidiary Consolidated Gold Company Zambia, with Array Metals, a global mining firm to process gold ore in Mumbwa, west of Lusaka.
An initial investment of approximately $2.5 million will be invested in this first stage of the project and will go towards the setting up of a gold wash plant and other mining machinery to mine and process placer gold raw material.
In the JV agreement, CGCZ will hold a 65% stake and Array Metals Zambia will have 35% in the project, with an initial phase targeted gold production of about 3 tonnes, worth approximately $150 million at current prevailing market prices.
Array Metals Group Vice President Chris Rugari said after the signing of the agreement that the company has a two-year study conducted by Array Metals that has an estimated inferred resource by JORC standards of 3 million tonnes of gold ore material containing between 2.5 and 3.5 grams of the precious metal per tonne.
Mr Rugari stated that overall the total targeted gold production is 7, 500 kilograms from this resource, estimated to be worth $400 million at the current prevailing market price.
He however said that the agreement with CGCZ will first process part of the resource and later ramp up production and processing.
Witnessing the signing of the agreement, ZCCM-IH Chief Executive Officer Mr Mabvuto Chipata said that ZCCM-IH’s strategic drive to harness the gold potential as mandated by Government from areas with recorded gold occurrences in the country is aimed at contributing to the 40 tonne target, which can only be achieved through such partnerships.
And CGCZ Chief Executive Officer Faisal Keer further stated that the CGCZ is partnering with various small-scale gold miners in the country by providing mining technical expertise, and providing access to earth moving machinery and gold processing lines to kick-start and boost their gold production.
Mr Keer added that the mining and processing operations in the Mumbwa project is earmarked to start by Mid June 2020, once all statutory and regulatory approvals are obtained.
“As a medium-sized company, we are very excited about this partnership because it gives us an opportunity to work directly with the Government in contributing meaningfully to the development of Mumbwa traditionally known for agriculture, through economic diversification, local participation and job creation”, Mr Rugari added.
CGCZ is a gold processing and trading Joint Venture partnership between Karma Mining Services and Rural Development (55%) and ZCCM-IH (45%).
This is according to a statement issued to the media by ZCCM-IH Public Relations Manager Loisa Kakoma.
These should have been government’s majority funded projects to help boost our weak currency. But no, once again we opt for the worst deals.
$400m dollars at market value
CGCZ @ 65% = $260m
ZCCM-IH @ 45% = $117m
Government @ 77.7% = $90m
Out of a total of a possible $400m, government only walks away with 22%. Laughable
Dead give away by the govt. Please explain why we always get the smallest share from our resources! All these Mining companies sound like fishy setups to filtch from the greater population. And ZCCM is nothing more than a facilitator of Zambia’s fraud of the century.
We urgently need to stop this traditional govt conduct which started after President Kaunda. We want control of our resources.
Jason I beg to differ and stand to correction
Is ZCCM-IH Not a government company
Indeed it is. It is 77% owned by the government. But if you break down the structure of the joint venture, the face value of what the government would see is only 22%
22% may be low but the important thing is that government is involved from the start. However, we should not only be content with holding shares but we must also find creative ways of how to enrich ourselves from gold production. Merely exporting tonnes of gold will only enrich foreigners and keep our people poor. We need to train Zambian goldsmiths and provide them the opportunity to benefit from the industry.
So Lazy Lungu has already silently replaced the CEO position of ZCCM…who is this Mr Mabvuto Chipata?
The useless and inept govt at it again rushing to give the opportunity to foreigners at the expense of interested Zambian parties. Are there no capable zambians who can profitably run that mine. Will Zambia always be an extraction point? Why do we rush to give such opportunities away to foreign people so that we can continue our trend of begging and succumbing to the the demands of foreign companies whenever they want things to go their way. Is this the vision we have for Zambia, doesn’t government have the resources to manage the mine?